Kleist Comments

MORNING MEATS 7/11/14

Posted on July 11, 2014 by Dani Schwebach

CATTLE: Cash cattle this week: $155.-157.00 and $246-249.00 dressed ; on 100 boxed loads cut outs higher @ up. $1.60 @ $252.17(c), up. $1.26 @ $243.52 (s) mod. demand; Carcass Equivalent: $235.80 up. $.68.
COMMENTS: What now? August cattle at a $7-8.00 discount to the live still and technically oversold. Yet one can ask—is a major seasonal decline coming in late? Some talk higher fat cattle availability and some talk beef demand topped out or a combination of both? Logically ‘both’ are the tilt but then if it warrants probing the short side at such a discount? Another heavy volume day yesterday (108,000) and while the total didn’t change much, August fell 11,670 while the V/Z/G picked up most of it: those ‘rolled’ new longs out of pocket already. On the charts, the only reasonable sell area around the $150.62-151.52 but I am taking an aside position in here. August liquidation also tied to the reported index-fund repositioning? If so a whipsaw likely.

HOGS:
Interior cash hogs mixed @ dn. $2.53 (W), N/c (E): rough avg. $130.00. Pork cut outs fell $1.03 @ $133.41. Lean index 07/09 @ $131.63 up. $.70.
COMMENTS: August hogs dangerously close to its ‘range spike low’ at $126.07 and a close under likely a downside breakout. Unlike the cattle, August hogs are discount to the lean/interior markets so selling it short down here could be dangerous IF the PEDv kicks in hard (not many talk about it much after the big price break). Open interest little changed in total even as August fell 6400 amid good volume. Maybe like the cattle, the August dragged down the other months helped by Index-fund liquidation? USDA report might signal the PEDv fallout? Still a volatile trading affair.

Kleist Comments

Disclaimer: Trading options and commodities involves risk of loss and my not be for every investor. Past trading results may not be indicative of future performance. Although information and opinions provided herein are compiled from sources believed reliable, the sender, EBOT Trading, or its principals cannot attest as to accuracy or assume any responsibility for any errors or omissions as the information may not be complete or events may have changed.